Correlation Between Leroy Seafood and Creo Medical

Can any of the company-specific risk be diversified away by investing in both Leroy Seafood and Creo Medical at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Leroy Seafood and Creo Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Leroy Seafood Group and Creo Medical Group, you can compare the effects of market volatilities on Leroy Seafood and Creo Medical and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Leroy Seafood with a short position of Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leroy Seafood and Creo Medical.

Diversification Opportunities for Leroy Seafood and Creo Medical

-0.69

Correlation Coefficient

Leroy Seafood  Creo Medical

Excellent diversification

The 3 months correlation between Leroy and Creo is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Leroy Seafood Group and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group and Leroy Seafood is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Leroy Seafood Group are associated (or correlated) with Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Leroy Seafood i.e., Leroy Seafood and Creo Medical go up and down completely randomly.

Pair Corralation between Leroy Seafood and Creo Medical

Assuming the 90 days trading horizon Leroy Seafood Group is expected to generate 0.47 times more return on investment than Creo Medical. However, Leroy Seafood Group is 2.11 times less risky than Creo Medical. It trades about 0.05 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.26 per unit of risk. If you would invest  4,940  in Leroy Seafood Group on August 31, 2024 and sell it today you would earn a total of  223.00  from holding Leroy Seafood Group or generate 4.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Leroy Seafood Group  vs.  Creo Medical Group

Leroy Seafood Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Leroy Seafood Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Leroy Seafood is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Creo Medical Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Creo Medical Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Leroy Seafood and Creo Medical

The main advantage of trading using opposite Leroy Seafood and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leroy Seafood position performs unexpectedly, Creo Medical can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Creo Medical will offset losses from the drop in Creo Medical's long position.

The idea behind Leroy Seafood Group and Creo Medical Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.